Investors are keenly evaluating the performance of two notable healthcare companies, Ontrak (NASDAQ: OTRK) and Encompass Health (NYSE: EHC), to determine which stock offers superior potential. This analysis compares the two firms across various metrics, including earnings, valuation, analyst recommendations, institutional ownership, and overall profitability.
Earnings and Valuation Insights
The comparison begins with an examination of revenue, earnings per share, and valuation metrics for both companies. Ontrak’s earnings reflect its unique approach to healthcare, leveraging artificial intelligence and telehealth to provide services that improve chronic conditions. Encompass Health, on the other hand, operates inpatient rehabilitation hospitals, focusing on patients recovering from serious medical conditions.
In terms of institutional ownership, Ontrak has 12.9% of its shares held by institutional investors, while a significant 97.3% of Encompass Health’s shares are owned by such entities. This disparity signifies a strong belief among large investors in Encompass Health’s long-term growth prospects. Additionally, Ontrak has 1.9% insider ownership compared to Encompass Health’s 2.0%, indicating similar levels of executive investment in both companies.
Analyst Ratings and Profitability Metrics
Current analyst ratings present a striking contrast between the two firms. Ontrak holds a consensus target price of $3.00, reflecting a remarkable potential upside of 13,536.36%. In comparison, Encompass Health’s target price is $139.86, which indicates a more modest potential upside of 12.29%. Analysts suggest that Ontrak’s higher prospective return makes it a more attractive option for investors, despite its smaller market presence.
Evaluating profitability, Ontrak and Encompass Health exhibit notable differences. The companies’ respective net margins, return on equity, and return on assets offer insights into their operational efficiencies.
Ontrak is characterized by a higher level of volatility, with a beta of 1.97. This figure indicates that its stock price is 97% more volatile than the S&P 500. In contrast, Encompass Health’s beta of 0.93 suggests it is 7% less volatile than the broader market, making it a potentially safer investment for risk-averse investors.
Company Profiles
Ontrak, Inc., headquartered in Miami, Florida, focuses on delivering telehealth-enabled solutions. The company provides services aimed at individuals with behavioral health conditions that contribute to chronic medical issues, such as diabetes and hypertension. Its integrated platform combines evidence-based interventions with community care to address social determinants of health. Formerly known as Catasys, Inc., Ontrak rebranded in July 2020 to reflect its innovative approach.
Conversely, Encompass Health Corporation, based in Birmingham, Alabama, specializes in post-acute healthcare services. The company operates inpatient rehabilitation hospitals, offering comprehensive treatment for individuals recovering from debilitating medical conditions, including strokes and neurological disorders. Encompass Health transitioned from its previous identity as HealthSouth Corporation in January 2018.
In summary, while Encompass Health outperforms Ontrak in most of the analyzed factors, the stark contrast in potential upside indicated by analyst ratings positions Ontrak as a compelling option for investors willing to embrace higher risk. As the healthcare sector continues to evolve, both companies present distinct opportunities for growth and investment.
